Palm Beach County approves Related Ross' $300M convention hotel with land sale-leaseback

Palm Beach County commissioners have approved Related Ross' plan for a second convention center hotel in West Palm Beach, a 400-room Hilton Curio that Commercial Observer values at about $300 million, structured so the county buys the 1.8-acre site for $26 million and leases it back to the developer for 33 years.

The parcel, at 900 South Rosemary Avenue, is a surface parking lot today, sitting alongside the Palm Beach County Convention Center and the 400-room Hilton West Palm Beach. Related Ross will build an 18-story tower there with 20,800 square feet of meeting space and 7,400 square feet of retail.

The county's return is set in the ground rent, which starts at $1.1 million a year and escalates 3 percent annually, and in a 6 percent cut of gross revenue above $77 million, a threshold that also rises 3 percent a year. The base term runs 33 years, with extension options that could take the agreement to 97 years, over which the county expects roughly $1 billion in rent and revenue participation, according to the report. Related Ross is exempt from property taxes on the project and, according to the report, will not seek additional incentives.

The approval closes a loop the county opened in 2023, when it sought proposals for a second convention hotel after concluding its existing one was too small and business had gone elsewhere. The first hotel was Related Companies' work, built in 2016 on a 3.4-acre county-owned parcel at 600 Okeechobee Boulevard. Related Ross, founded by Stephen Ross in 2024 after he ran Related Companies, is developing the second, with a West Palm Beach build-out that includes two Class A offices funded in 2025 by a $772 million construction loan and the Wellington land purchase that marked its first ground-up project outside West Palm Beach.

A sale-leaseback into a public landlord does something specific for a developer in a market where starts have frozen and entitlement is the scarce asset. It moves the land basis onto a counterparty that wants a rent stream and a top-line cut rather than a hotel, leaving the sponsor with the leasehold, the construction risk, and whatever the property earns above the $77 million revenue-share threshold. The build-over-buy trade arrives here with a municipality supplying the dirt and a 3 percent escalator running for at least three more decades.

What the county forgoes in property tax revenue over a term that could run 97 years, and what that does to the net of its $1 billion projection, the report does not say.